Friday, February 06, 2009Critics Call Delaware a Tax Haven

LYNNLEY BROWNINGCritics Call Delaware a Tax Haven

Some corporate addresses scream money. Then there is North Orange Street, which whispers it. North Orange, a ho-hum thoroughfare in Wilmington, Del., is, on paper, home to more than 6,500 companies. Many of them are empty shells. They make nothing and sometimes employ just a lone clerk. But all are there for the same reason: to help corporations avoid paying taxes in other states.

The Obama administration has riled corporate America by cracking down on secretive offshore tax havens.
But now a big onshore refuge — Delaware — is drawing scrutiny, too. Squeezed by hard times, states are pushing to collect taxes that corporations are avoiding through Delaware shell companies. Maryland has reclaimed $267 million in such taxes, including interest and penalties, and has assessed an additional $143 million.

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